Project Description

Red Fox Run is a luxurious and maintenance free living community for active adults, 55 and older, in Longmont, Colorado. • Red Fox Run will include 32 new homes when complete: – Two buildings will be a triplex model – Twelve buildings will be duplex model – Existing house on property will be separated and modified to become a club house and single family home

Project Location:

12121 Saint Vrain Road Longmont, Colorado 80501

Colorado Front Range Location

Location Benefits

• Close proximity to city of Boulder, Front Range Foot Hills, and Denver-Metro Area, including Denver International Airport • Property is adjacent to Longmont’s only private country club and golf course • Since 2000, the Longmont area has grown 17% • In 2000,

Forbes

Magazine listed the Longmont/Boulder area as number 3 nationwide in Highest Educated population percentage • In June of 2006, Longmont was named an “All American City” by the National Civic League • In 2008,

Money

Cities” report Magazine included Longmont in their “Best Small • 4.69% state income tax rate • 7.96% property tax rate on homes

Arial View of Project Location

Red Fox Run is located across the street from the only private golf course in Longmont, Fox Hill Country Club

55 and Older Active Adults

The aging of our population shows growth in housing projects that emphasize quality and maintenance free living. Amenities that enhance an active lifestyle are required for success.

Red Fox Run would provides the following opportunities to its owners: • Freedom from home & landscape maintenance • Private club house with outdoor patio and entertaining area • Greenway connections to the community • Adjacent private golf course and county club access

Standard Amenities

• Ranch style homes • Utilization of “green” technologies – Energy efficient stainless kitchen appliances – Energy efficient natural gas heat – Tinted windows • Brick or stone with stucco construction • Connection to bike path and greenway opportunities • Fox Den Club House access with sauna, hot tub, state of the art (ROM) weight machine, outdoor fire pit and BBQ grill • Private patio for each home • 10’ and 18’ wide garage doors • Exterior maintenance of buildings and grounds • Central air conditioning

• • • • • • •

Optional Amenities

Finished second story – Option of additional closets and configuration for upstairs Basement – Finished/unfinished Floors – Hard wood – Tile – Slate – Upgraded carpeting Upgraded kitchen appliances, additional oven, etc.

In home security camera for on & off site management Crown moldings Whirl pool jetted bath tubs with tank-less hot water heaters • • • • • Upgraded doors Concrete enclosed sound proof area under garage floor for storage, wine cellar, protection, etc.

Elevator option Extended garage for tandem parking Membership to Fox Hill County Club (monthly dues paid by home owner) which includes access to: – 18 hole, par 72 golf course – Driving range – Tennis courts – Swimming pool – Weight machine – Club House restaurant – Banquet room(s)

Model Floor Plans

Black Fox Model

Street View

Black Fox Model Floor Plan

1,596 square feet

Silver Fox and Red Fox Model Combo

Street View Silver Fox Model Red Fox Model

Silver Fox Model 1,258 square feet Red Fox Model 1,498 square feet

Red Fox Run Ownership Direction

In the current development process of Red Fox Run, the project end-result is still able to be determined. The decision is still able to be made whether to: a) sell each individual home under the government of a HOA b) retain ownership of the project, lease individual homes with a management company, and sell at a later date

Sales vs. Leasing of Homes

SALES

• Sales advantages include: – More immediate return on investment – Shorter duration of project involvement – Conventional sales with a Home Owners Association – Attached patio homes with unique community amenities

LEASING

• Leasing advantages include: – Positive cash flow when project is 80% leased – Appreciation of project over time – Attached patio homes with unique community amenities – Best potential return on investment – Unique services for community • Vehicle with Driver (8am – 7pm) • “Handy Man” services • 8hrs/7day Medical Services

Overview of Projected Expenses

Sales or Leasing

Development Expenses:

33 Homes will cost $81,438 each

Vertical Construction:

45,234 finished square feet will cost $148/square foot: = $6,694,632*

TOTAL CONSTRUCTION COST = $9,382,095

*This does not include any possible extras and upgrades

Detailed Projected Expenses

Sales or Leasing Land Cost City Fees Affordable Housing Participation Raw Water Traffic Offsite Transportation Utility Improvements Inspections Utility Tapping Fees Phase 1 Site development $1,200,000 $ 450,000 $ 204,355 Phase 2 Site development Phase 3 Site development Off-site Drainage $ 270,136 $ 286,825 $ 96,147 Landscaping, Gas, Electric, General Conditions $ 450,000

TOTAL = $2,957,463

Sales Phasing Revenue

PHASE 1

Homes

(2) Black Fox (1) Red Fox (1) Silver Fox (1) Gray Fox (existing house)

5 HOMES Price

$414,740 $393,908 $327,969 $401,241 PHASE 2

Homes

(6) Red Fox (5) Silver Fox

11 HOMES Price

$393,908 $327,969

Total Price

$829,480 $393,908 $327,969 $401,241

$1,952,598 Total Price

$2,363,448 $1,639,845

$4,003,293

PHASE 3

Homes

(9) Red Fox (2) Snow Fox (6) Silver Fox

17 HOMES Price

$393,908 $391,322 $327,969

TOTAL COST TOTAL SALES GROSS PROFIT of 23% (before Real Estate Commissions) Total Price

$3,545,172 $782,644 $1,967,814

$6,295,630 $9,382,095 $12,251,521 $2,869,426

Detailed Standard Home Pricing: Sales

Home Name

Silver Fox

Sales Price/Home

$327,969

# of Homes

12

Total Home Sales

$3,935,628 Red Fox $393,908 16 $6,302,528 Black Fox Snow Fox Gray Fox (existing house)

TOTAL

$414,740 $391,322 $401,241 2 2 1

33

$829,480 $782,644 $401,241

$12,251,521

Lease Price Breakdown

Total Construction Cost = $9,382,095 Interest on 25 year loan at 8% interest = $9,382,200 Payback of construction cost + interest =

Project Yearly Payback Cost = Project Monthly Payback Cost = Individual Home per sq/ft Payback Cost =

Leasing Management & Amenities Cost

Project Yearly Cost = Project Monthly Cost = Individual Home per sq/ft Cost =

GRAND TOTAL LEASING EXPENSES TOTAL YEARLY = TOTAL MONTLY = TOTAL SQ/FT = $18,764,295

$750,568 $62,547 $1.38

$451,512 $37,627 $.83

$1,202,170 $100,180 $2.21

Detailed Leasing Expenses

RED, SILVER, SNOW & BLACK FOX HOMES Amenities Provided

Landscape (mowing, trimming, floral, etc.) Snow Removal Upkeep (roofing, paint, etc.) Utilities (gas & electric) “Handy Man” services 8hrs/7days Medical Service Vehicle/Van

Yearly Budget

$16,800 $6,000 $28,342 $92,070 $14,400 $144,000 $8,400 Insurance & Taxes $59,200

FOX DEN CLUB HOUSE Amenities Provided

Maintenance and Cleaning Equipment Replacement Insurance & Taxes Utilities

Yearly Budget

$24,000 $4,000 $2,500 $7,800

GRAY FOX – HOME FOR DRIVER Amenities Provided

Driver Salary (8am – 7pm) Insurance & Taxes

Yearly Budget

$42,000 $2000 Red, Silver, Snow & Black Fox Homes Fox Den Club House Gray Fox Home

GRAND TOTAL TOTAL YEARLY COST

$369,212 $ $38,300 $44,000

451,512 TOTAL MONTHLY COST

$30,768 $ $3,192 $3,667

37,627 COST PER MONTH PER HOME

$962 $100 $115 $1,177

Leasing Home Revenue

Home Total

(12) Silver Fox: 1,258 sq/ft (16) Red Fox: 1,498 sq/ft (2) Black Fox: 1,596 sq/ft (2) Snow Fox: 1,496 sq/ft

TOTAL MONTHLY LEASING REVENUE TOTAL MONTHLY LEASING EXPENSES MONTHLY GROSS PROFIT 30% Home Lease Cost Rate

$2,780 $3,310 $3,527 $3,306

100% Occupancy

$33,360 $52,960 $7,054 $6,612

$99,986 Suggested Lease Cost with 30% Markup

$3,610

100% Occupancy Project Income

$43,320 $4,299 $4,580 $68,784 $9,160 $4,293

-

$8,587

$129,851 $100,180 $100,180 $29,671

Name

Competing Active Senior Housing

Location

Aspen Grove Longmont Hover Ridge Duplexes Longmont Villas at Hover - Luxury Senior Housing Regent Apartments – rental only Sonoma Village at Ute Creek Vistas Longmont Longmont Longmont Longmont Villas 66 West Point Longmont Longmont

55 +

Yes Yes Yes Yes No No Yes

Size

1,635 sq ft 2,600 sq ft 1,419 sq ft n/a 1252 sq ft 1,033 sq ft 1,200 sq ft 1,358 sq ft

Price per unit

$284,000 $250,000 $362,000 $1,320 $2,595 $200,000 $250,000 $230,000 $310,000

Built

1998 1983 2008 1987 2008 2008 2008 1993

Competitor: Aspen Grove

55 + Size Price Built

Yes 1,635 sq ft $284,000 1998

Competitor: Hover Ridge Duplexes

55 + Size Price Built

Yes 2,600 sq ft $250,000 1983

Competitor: Villas at Hover Luxury Senior Housing

55 + Size Price Built

Yes 1,419 sq ft $362,000 2008

Competitor: Regent Apartments

55 + Size Price Built

Yes n/a $1,320 - $2,595 1987

Competitor: Sonoma Villa at Ute Creek

55 + Size Price Built

No 1252 sq ft $200,000 2008

Current Project Status

• Meets requirements from the City of Longmont and zoned as “individual units for sale as a 55 and older community” • Verbal agreement with adjacent property owner for utility crossing • Draft of HOA documents • 1,200,000 equity value

Projected Partner Involvement Options

A. Partner assumes existing mortgage from current lender; payback when project is 75% completed.

B. Partner could assume any portion of equity based on the value of $1,200,000